NEW YORK, Nov 16 (Reuters) - The U.S. dollar weakened and Treasury yields pulled back on Friday after a top Federal Reserve official said U.S. interest rates were near a neutral rate, while uncertainty over Britain’s exit from the European Union clouded currency and other markets.

Oil prices climbed for a third day in a volatile session as it clawed back from steep recent losses.

Markets were shaken by comments from Richard Clarida, newly appointed Fed vice chair, who said in a CNBC interview that U.S. interest rates were nearing Fed estimates of a neutral rate, and being at neutral “makes sense.”

He also said there was “some evidence of global slowing.”

“Investors are starting to look at the vice chairman’s remarks this morning as perhaps a little dovish, and it is bringing up worries about global growth,” said Chris Gaffney, president of World Markets at TIAA Bank in St. Louis.

While the Fed is widely expected to raise rates in December, the number of hikes next year was of investor debate.

On Wall Street, the Dow Jones Industrial Average rose 105.94 points, or 0.42 percent, to 25,395.21, the S&P 500 gained 3.52 points, or 0.13 percent, to 2,733.72 and the Nasdaq Composite dropped 28.12 points, or 0.39 percent, to 7,230.92.

Clarida’s comments helped support stocks, which were also boosted by comments from President Donald Trump on trade. Trump said China wanted to make a deal on trade and the United States may not need to impose further tariffs, as the world’s two largest economies worked on an agreement to eliminate trade tensions.

The pan-European STOXX 600 index lost 0.20 percent, as traders waited on more clarity involving Britain’s exit from the EU, known as Brexit.

British Prime Minister Theresa May won the backing of the most prominent Brexiteer in her government as she fought to save a draft EU divorce deal that has stirred up a plot to force her out of her job.

After tumbling a day earlier, sterling was last trading at $1.2825, up 0.40 percent, while the euro was up 0.74 percent to $1.141.

“Sterling volatility has woken up from its 100-year slumber and is likely to remain reactive,” said Ulrich Leuchtmannan, FX strategist at Commerzbank.

The dollar index, which measures the greenback against a basket of currencies, fell 0.49 percent.

Benchmark 10-year notes last rose 11/32 in price to yield 3.0774 percent, from 3.118 percent late on Thursday.

Oil traded up in a volatile session, supported by expectations the Organization of the Petroleum Exporting Countries would agree to cut output next month, though prices were set for a weekly drop on underlying oversupply worries.

U.S. crude rose 0.48 percent to $56.73 per barrel and Brent was last at $67.00, up 0.57 percent on the day.